Onyx Alpha: Testing Sentiment
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in Sing fuel oil and NWE gasoline.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in Sing fuel oil and NWE gasoline.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
The gasoline market has capitulated in the last week as the bears woke up from hibernation, putting the summer demand story to bed. Initial short-covering flows earlier this months gave bulls false hope as outright prices gapped down, breaking below previous support levels and falling to the lowest level since January 2024. The front-month September EBOB crack sold off from $15.50/bbl to $12.50/bbl, while the Sep/Oct EBOB spread fell from $45/mt to $38/mt.
Oct’24 Brent futures flat price rose to over $79.40/bbl at 14.00 BST before it was pressured to $77.96/bbl at 17.19 BST (time of writing). Secretary of State Antony Blinken arrived in Tel Aviv to push for a Gaza ceasefire, but Hamas accused Israel of undermining the effort. Netanyahu described his meeting with Blinken as “positive” and “conducted in good spirit.” Hezbollah claimed attacks on Israeli military sites, including Zabdin and Ramim barracks, and a missile strike near the Lebanon-Israel border. APA Corp is exploring the sale of oil and gas assets in the Permian Basin, valued at around $1 billion. The sale, managed by RBC Richardson Barr and Truist Securities, aligns with APA’s focus on shale production and debt reduction. The assets produce over 22,000 barrels of oil equivalent per day, with 60% being oil. Oil production in Libya’s Waha field has been restored to normal levels, of around 300kb/d. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.63/bbl and $2.25/bbl, respectively.
Last week, the Oct’24 Brent futures failed to hold strength after the highs of $82.50/bbl on 14 Aug was not maintained as the geopolitical risk emanating from the Middle East has become somewhat normalised as Iran’s retaliation continues to brew amid ceasefire negotiations in Doha. It seems the focus of the market is on macroeconomics this week, as the Jackson Hole gathering of the Fed will hopefully give clues to the extremely hands-off crude market.
Although Brent crude futures saw a solid start last week, price action closed below $80/bbl on Friday. Middle East geopolitical concerns have eased alongside poor Chinese demand sentiment, amid weaker-than-expected economic data. The Oct’24 contract is trading at $79/bbl as
Risk assets saw more calm in the week ending 13 Aug, with crude oil specifically enjoying the newfound sentiment. However, this shift away from the previous three weeks’ bearishness was more a product of de-risking than one of bullish positioning.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
The Oct’24 Brent futures contract stood above $79.50/bbl at 08:00 BST today but slid off to $78.80/bbl by 11:25 BST (time of writing). The Oct/Nov Brent futures spread also softened from above $0.80/bbl at 07:00 BST to $0.75/bbl at the time of writing).
Long Sep 3.5 barges cracks With less volumes of HSFO coming into Northwest Europe from the US, the recent tightness has seen prices rise. We are following the trend with this trade.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
The October Brent futures flat price has seen a strong afternoon, trading from a low of $78.64/bbl at 12:30 up to $80.06/bbl at 14:50 before retracing and settling around $79.73/bbl at the time of writing (17:20 BST). In headlines, data has emerged highlighting that China was the top buyer of Russian crude in July, purchasing 47% of Russia’s total exports, followed by India with 37%, the latter amounting to $2.8 billion, according to the Centre for Research on Energy and Clean Air (CREA). Furthermore, around 80% of India’s fossil fuel imports from Russia were crude oil, while India accounted for 18% of Russia’s coal exports, second to China, which purchased 45%. Russia has become India’s leading oil supplier since the invasion of Ukraine, and more Indian refiners are now exploring long-term oil supply deals with Russia; Some of India’s private refiners, including Nayara Energy—partially owned by Russia’s Rosneft—and Reliance Industries, which runs the world’s largest refinery in Jamnagar, have already secured long-term agreements to buy Russian oil. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.77/bbl and $2.69/bbl, respectively.
The expansion of LNG exports is responsible for scores of premature deaths and nearly $1bn in annual health costs, according to a new report from the green groups Greenpeace and Sierra Club. The report links air pollution from LNG exports to an estimated 60 premature deaths and $957m in total health costs each year.
The Oct’24 Brent futures contract firmed up to $80.90/bbl around 09:05 BST, following which the flat price sold off to $79.65/bbl at 11:35 BST (time of writing).